HQ 110754: Applicability of the Coastwise Trade Laws to the Carriage of Merchandise Between the U.S. and Guam either directly, or Via the Commonwealth of the Northern Mariana Islands or the Federated States of Micronesia

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 110754
                        February 23, 1990

VES-3-07-CO:R:P:C 110754

CATEGORY:  Carriers

Jean Melancon, Esquire
Suite 902-A, Pacific News Building
238 Archbishop F.C. Flores Street
Agana, Guam 96910


RE:  Applicability of the Coastwise Trade Laws to the Carriage of
     Merchandise Between the U.S. and Guam either directly, or
     Via the Commonwealth of the Northern Mariana Islands or the
     Federated States of Micronesia


Dear Mr. Melancon:

     This is in response to your letter of January 3, 1990, in
which you request a ruling on the applicability of the coastwise
trade merchandise statute (46 U.S.C. App. 883) to the transpor-
tation of ductile iron pipe between the U.S. and Guam, either
directly or via other Pacific transshipment points.

FACTS:

     The AME Matex Corporation of New Jersey (AME) has contracted
to provide one-half-million pounds of ductile iron pipe to a Guam
corporation for use in a public works water project in Guam.
Primary and alternative routes for the transportation of the pipe
are proposed.

     The first proposal is to carry the cargo directly from the
mainland United States to Guam aboard a foreign-flag vessel.  In
the alternative, AME proposes to take the cargo to either the
Commonwealth of the Northern Mariana Islands (CNMI) or to the
Federated States of Micronesia (FSM) on a foreign-flag vessel for
transshipment to a U.S.-flag vessel and delivery to Guam.

ISSUE:

     Whether any or all of the proposed transportation itiner-
aries set forth in the Facts section of this ruling are pro-
hibited under the Jones Act merchandise transportation statute
(46 U.S.C. App. 883).

LAW AND ANALYSIS:

     Section 27 of the Act of June 5, 1920, as amended (41 Stat.
999; 46 U.S.C. App. 883, often called the Jones Act), provides,
in pertinent part, that:

     No merchandise shall be transported by water, or by land and
     water, on penalty of forfeiture of the merchandise (or a
     monetary amount up to the value thereof as determined by the
     Secretary of the Treasury, or the actual cost of the
     transportation, whichever is greater, to be recovered from
     any consignor, seller, owner, importer, consignee, agent, or
     other person or persons so transporting or causing said
     merchandise to be transported), between points in the United
     States * * * embraced within the coastwise laws, either
     directly or via a foreign port, or for any part of the
     transportation in any other vessel than a vessel built in
     and documented under the laws of the United States and owned
     by persons who are citizens of the United States * * *.

     Pursuant to 46 U.S.C. App. 877, the coastwise laws are
applicable to Guam.  Under 46 U.S.C. 12105(b), however, a vessel
for which a registry is issued by the United States Coast Guard
may be employed in trade with Guam.  Under that statute and 46
U.S.C. 12102, a foreign-built, United States-owned vessel may,
under certain circumstances, be issued a registry.  In inter-
preting these statutes, the Customs Service has ruled that
foreign-built, United States-registered vessels may be used for
transport between points in Guam.


     Although the restrictions on vessels used in the trade
between the U.S. and Guam have been relaxed, in that registry
vessels maybe so employed, section 883 still provides the
relevant interpretative guideposts.  The statutory language
restricts merchandise transportation "... either directly or via
a foreign port, or for any part of the transportation...".
Since registry vessel transportation is permissible, either such
vessels or coastwise qualified vessels must be used for the
entirety of the transportation.  A proposed transshipment in
either the CNMI or FSM (neither of which is considered a
coastwise point under the facts as presented), will not act to
interrupt the transportation between the U.S. and Guam.  The
proposed transportation may only be accomplished, regardless of
the itinerary, with the use of coastwise qualified or U.S.-flag
registry vessels.

HOLDING:

     A shipment of merchandise between the U.S. and Guam, even
though transshipped at a non-coastwise point, may only be accom-
plished by coastwise-qualified or U.S.-flag registry vessels.

                                Sincerely,




                                B. James Fritz
                                Chief
                                Carrier Rulings Branch